In each of the past three quarters, electronics retailer Circuit City (NYSE:CC) has missed Wall Street estimates -- either by a large margin as in Q3 2006, or a small one, as it did last quarter. Will the fourth time be the charm that breaks the chain and lands Circuit City an "earnings beat?" We'll find out on Thursday when it reports fiscal Q2 2008 earnings.

What analysts say:

  • Buy, sell, or waffle? Twenty-five analysts follow Circuit City. Five give it buy ratings, 18 more say hold, but only two counsel selling the shares.
  • Revenues. On average, they're looking for sales to slide 2% to $2.78 billion.
  • Earnings. It doesn't look too promising for the company to post profits. Wall Street's looking for a loss of $0.12 per share.

What management says:
You can't make this stuff up. The most recent 8-K filing at Circuit City describes the appointment of Ceridian (NYSE:CEN) CEO Ronald Turner to its board. While Ceridian is generally considered an IT company, Circuit City decided to describe Ceridian as an IT company operating in the "human resource, transportation and retail markets." Makes you wonder if someone is feeling a little sensitive over the brouhaha that erupted after it decided to fire its best employees earlier this year because they were paid too much. 

In other management news, Circuit City announced the appointment of a new CFO, effective July 30. An alumnus of two of Circuit City's fiercest foes, Best Buy (NASDAQ:BBY) and Sears Holdings  (NASDAQ:SHLD), Bruce Besanko seems almost uniquely qualified to help chart Circuit City's financial course. Sadly, he may not be sticking around long. While the press release mentions only his appointment and qualifications, an accompanying 8-K filing contains the following cryptic note: "Mr. Besanko will serve in this position until his successor is elected."

What management does:
Will Besanko stick around long enough to reverse the year-long slide in gross, operating, and net margins at Circuit City? Investors can hope.

Margins

2/06

5/06

8/06

11/06

2/06

5/06

Gross

24.4%

24.3%

24.3%

23.8%

23.6%

23.2%

Operating

2.1%

2.3%

2.3%

1.7%

1.2%

0.4%

Net

1.2%

1.3%

1.4%

1.1%

(0.1%)

(0.6%)
All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
On a rolling average basis, Circuit City's sales have only inched up 3.7% over the past year, gross profits have fallen 1.1%, and operating profits have fallen 80.2% as SG&A costs have been on the rise. Gee, you mean firing all the most experienced salespeople didn't boost sales and destroying employee morale didn't cut payroll costs? Who woulda thunkit?

Meanwhile, next door, Motley Fool Stock Advisor andMotley Fool Inside Value pick Best Buy just finished reporting a 15% rise in revenue during its second quarter. Yeah, I actually do think it's about time Circuit City imported a Best Buy alum. Now let's see if they can find a way to get him to stick around long enough to do some good.

For the Fool skinny on Circuit City's last quarter news and what it's been saying since, read: